The Criminal Investigation Division (CID) investigates crimes defined in statutes other than the Tax Code when the offense is related to the Comptroller's office. The most common of these cases are tax-related investigations of violations of the Penal Code, including:
In some cases, the CID pursues Penal Code charges when the Tax Code specifically allows the state to prosecute criminal conduct under other law (for example, Tax Code, Sec. 151.7101). A charge of misapplication of fiduciary property, an offense under Penal Code, Sec. 32.45, may be filed instead of failure to pay taxes collected, a crime under Section 151.7032 of the Tax Code.
If the facts indicate that a federal crime may have been committed, the CID may contact the federal law enforcement agency having jurisdiction over a potential case. The case may continue to be investigated jointly or solely by the federal agency.
At the conclusion of the investigation, if there is probable cause to believe a federal crime has been committed, the federal agency sponsors the case for prosecution with the U.S. Attorney’s Office having jurisdiction.
When consumers pay sales taxes, they trust merchants to forward their payments to the state. Both consumers and the state are victimized when unscrupulous merchants break that trust by intentionally failing to remit tax money — whether keeping, investing or spending it.
In passing Senate Bill 934 (SB 934) in 2011, the Texas Legislature markedly raised the stakes for criminals caught defrauding taxpayers in this way.
When consumers pay sales taxes, they do so trusting retailers to forward their payments to the state. When unscrupulous merchants obtain their tax money, then break their trust by intentionally failing to remit that money — perhaps keeping, investing or spending it — both consumers and the entire state are victimized. SB 934 dramatically raised the stakes for anyone caught defrauding Texas taxpayers in this way.
Enacted in 2011 by the 82nd Legislature, Senate Bill 934 amended the Tax Code to treat tax cheats more like thieves under the law. Now, anyone who collects and intentionally does not remit sales taxes could face felony charges, depending on the amount involved.
Felony penalties including possible prison time may be assessed for sales tax fraud if as little as $1,500 is pocketed, a sizable reduction from the minimum threshold of $10,000 in the previous statute. Stiffer penalties have been authorized up the scale to a first-degree felony for failing to remit $200,000 or more, punishable by five to 99 years or life in prison. Sales tax thieves who steal amounts ranging from $50 up to $1,500 can face county jail time.
SB 934 also amended the Penal Code to allow investigators to:
Sales tax fraud harms all Texans. Thanks to SB 934, the criminal justice system can punish these scammers in new and tougher ways. Felony cases may be pursued much more vigorously and prosecuted as money laundering and/or organized crime when deemed appropriate.